RIO DE JANEIRO, BRAZIL – The Industrial Confidence Index (ICI) calculated by the Brazilian Institute of Economy of the Getulio Vargas Foundation (FGV/Ibre) dropped 0.6 points in September, to 106.4 points, the second consecutive month of decline after four months of gains. In quarterly moving averages, the index declined 0.4 points.
“Although the industry showed good recovery in the second half of 2020, it has been facing difficulties maintaining the pace of recovery throughout 2021. The perceptions about the present and future situation have been oscillating due to cost pressures, high unemployment, economic and institutional instability. In this context, we can also add the water crisis that contributes to increasing inflationary pressure and the uncertainties regarding the possibility of expanding production in the coming months, making expectations for the end of the year more pessimistic, especially among the energy-intensive segments,” comments Claudia Perdigão, an economist at FGV/Ibre to Valor news.
The month’s result is influenced by a reduction in optimism considering the perspectives for the coming months and an accommodation of satisfaction in relation to the current situation. The Present Situation Index (ISA) decreased by 0.2 points to 109.2 points, the lowest value since August 2020 (98.7 points).
The Expectations Index (EI) dropped 1.0 points to 103.6. Among the items that make up the ISA, there was a worsening in the current business situation, whose indicator fell 2.7 points to 103.1 points, the lowest since August 2020 (99.1).
Among the items that make up the ISA, the current business situation worsened, with the indicator dropping 2.7 points to 103.1 points, the lowest since August 2020 (99.1). The indicator measuring total demand decreased 2.1 points to 107.6 points, while the inventory level rose 4.1 points to 116 points, the best result since March 2021 (118.2).
Of the indicators that make up the IE, the production forecast for the next three months was the one that most influenced the fall in the ICI in September, when it dropped 1.5 points to 99.7 points, the lowest level since May (93.1 points).
The outlook for the next six months also became less optimistic, the indicator that measures the business trend decreased 1.2 points to 102.7 points. The less optimistic outlook for production and business trends generates a slight drop in hiring intentions with a reduction of 0.4 points in the indicator for regular employment.
The Level of Utilization of Installed Capacity (Nuci) rose 0.5 percentage points to 80.2%, the highest since November 2014.
The survey collected information from 1,087 companies between September 1 and 24. The next Industry Survey will be released on October 27.
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